What is Sustainability Reporting?
The sustainability movement is a shift toward cultural and environmental responsibility that has gradually become the norm in the modern day. In fact, customers often select companies based on their ethical and sustainable impact. Because sustainability plays such a significant role in business growth and customer acquisition in most industries, reporting on your environmental and social performance is important.
This is the role of sustainability reporting. In the following content, we will define sustainability reporting, dive into the history of this reporting method, discuss the importance of sustainability, and conclude with the benefits of sustainability reporting.
Let’s dive in!
What is Sustainability Reporting?
Sustainability reporting is a tool through which companies can report on their environmental and social performance.
Sustainability reports differ from most financial or managerial reports in that they go beyond displayed data. “Sustainability reporting,” as the Boston College Center for Corporate Citizenship states, “is the disclosure and communication of environmental, social, and governance (ESG) goals—as well as a company’s progress towards them.”
Organizations that are dedicated to sustainable development can utilize sustainability reporting to better understand and improve this commitment.
What is Sustainable Development?
Sustainable development is the principle of balancing human development goals with the sustainability of natural resources and ecosystem services that future generations will depend on. Sustainable development has roots in sustainable forest management. This movement started with the depletion of timber resources and resulted in the sowing and planting of trees to prevent deforestation and preserve. Ultimately, sustainable development seeks to regenerate and maintain planetary resources for future generations.
The History of Sustainability Reporting
Corporate sustainability reports, by name, are a relatively new concept, but environmental reporting began in the late 1980s. The environmental reports were often created to attract investors interested in ethical investing, so they were not entirely non-financial. In the past two decades, the rise of non-financial reports, like sustainability, has expanded in popularity.
The current consideration regarding sustainability reporting is how much environmental information organizations should disclose to the public.
Is Sustainability Important?
Yes! Sustainability protects the world of tomorrow by developing goods in such a way that allows future generations to fulfill their needs. Sustainability considers the natural environment, ecosystems, occupations, and social justice.
Put another way, sustainability protects the environment in the long-term, preserving clean air and natural resources for generations. Humans – from the individual to the organization – can promote a sustainable world.
Is sustainability reporting important?
Yes. Sustainability reporting demonstrates that an organization is responsible, honest, and open. Additionally, reporting helps the organization understand their cultural and environmental impact. This understanding leads to risk management and steps toward becoming a more responsible and sustainable organization overall.
What Are the Benefits of Sustainability Reporting?
We have discussed that sustainability is essential! So, what are the specific benefits of sustainability reporting for modern organizations?
- Corporate reputation. As previously mentioned, sustainability reporting demonstrates to shareholders that your organization cares enough about the long-term health of the environment and humanity to publicly report on sustainability efforts
- Consumer confidence. Consumers love to support sustainable businesses, because they enjoy joining in and supporting the movement.
- Efficiency and waste reduction. Sustainability reporting leads to waste reduction and improved efficiency if organizations act on the insight provided through the report.
3 Steps to Good Sustainability Reporting
The Global Reporting Initiative (GRI)
Organizations can measure their sustainability by a set of standards, called the Global Reporting Initiative (GRI). According to Global Reporting:
The GRI Standards consist of Universal Standards and Topic Standards. Using these, an organization can prepare and report information that focuses on its ‘material topics’, reflecting its most significant sustainability impacts… GRI also offers various services, tools, and training to guide reporters through different stages of the reporting process, including their materiality assessment.
Use the GRI Standards as the basis for your sustainability reports. Once you are familiar with these, use the following three steps to create a good sustainability report.
- Set your goals
As an organization, decide what you want to accomplish. If your business is new to sustainability reporting, start small. Map your existing sustainability initiatives or calculate your first carbon footprint. Consider your water consumption, electricity consumption, and CO2 emissions, and adjust your goals to solve issues within your business.
- Collect and analyze data
Once you’ve determined your goals and indicators, you can collect data. Once you’ve created your sustainability report, analyze the data critically. Identify clear observations. Are there areas where your company is doing well? Are there areas that need improvement? How will these observations impact the way to structure your organization or manufacture your products moving forward?
- Communicate your report to shareholders and customers
We won’t lie – sustainability reports are not always easy reading. Customers may not take the time to read a 15-page PDF of your findings.
Find a way to communicate your report in an engaging and interactive way. Consider creating a slideshow presentation, video, infographic, or interactive website page to display your findings.
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